by Denis MacShane on 14th July 2020 @denismacshane
Roosevelt is invoked more than ever amid talk of a ‘new deal’ for today’s crisis. Rather fewer, however, recall the woman at the heart of his programme.
There is more mythical nonsense written about the ‘New Deal’ of Franklin Delano Roosevelt than of any other few years in 20th-century American history. It remains the favourite crutch of anyone who wants to propose a new policy—hence immediately demanding a latter-day New Deal. The latest to indulge in self-serving and dishonest New Deal invocations is the British prime minister, Boris Johnson, who has called for a ‘Rooseveltian approach to the UK’. As policy-makers contemplate the economic fallout across the world from Covid-19—with millions unlikely to find their way back to work under the old economic and labour-market paradigm—there may however be lessons from the Roosevelt era.
Then great political leaders rose to the challenge of helping people into work and protecting those who, through no fault of their own, were stranded by the ravages of right-wing economic ideology. The United States embraced what after 1945 became the norm in Europe—partnership between trade unions and firms, state-funded employment programmes and a raft of progressive legislation.
Nearly all of it was down to one woman, the US labour secretary, Frances Perkins. She remains almost unknown in Europe, even though her ideas and actions were reflected in much of what Europe did after the second world war.
In 1932 the president, Herbert Hoover, sent the US army in to clear unemployment protesters peacefully camping in Washington DC and rallying to demand work and still-unpaid demobilisation dollars owed from World War One. The feted WWII generals Douglas MacArthur and George Patton led their men against fellow Americans wanting only a square meal. Donald Trump, who evoked the pair in his 2016 presidential election campaign, recently also threatened to mobilise the military against Americans calling for a fair deal for African-Americans, and for an end to the racism of too many police forces who believe they are doing their president’s bidding.
In November 1932, Americans elected ‘FDR’ to end the unhappy Hoover years. He turned to Perkins, who held the post of labour secretary until 1945. The first female cabinet member in the US, she delivered a succession of progressive acts, which transformed relations between workers and employers and provided an unprecedented floor of social protection for Americans.
Perkins was born just as possibilities were opening up for women to work for progressive causes. Working with Al Smith as governor of New York state, she was a get-things-done do-gooder using state law to set up workplace inspections and a shorter working week for women. She took this forward after 1933, when FDR saw the need for the Democrats to enrol the voting strength of the rising industrial working class.
She brought in the Public Works Administration, which put America’s unemployed back to work. She made sure unions and her own department had a stake in the National Industrial Recovery Act. She enacted the Social Security Act to pay federally mandated unemployment benefits and pensions for the millions of older Americans who had no occupational pension. She introduced a national minimum wage and a 40-hour work week became the norm for American workers, while laws regulated overtime.
This was a radical programme but Perkins worked hard to bring employers on board. The New Deal helped craft unions but more important was the creation of industrial unions, so that all or most workers in a car factory or steel plant were represented by just one organisation. In contrast, Ford in Britain in the 1970s and 1980s had 14 unions, all demanding special attention to their members’ needs and unable to rise above such differences to speak and negotiate intelligently with one voice and leadership.
More assertive workers
Roosevelt was not always friendly towards workers and unions. He famously denounced the steelworkers’ union and their bosses in 1938, declaring ‘a plague on both your houses’.
At the time the brilliant Polish economist Michal Kalecki, Marxist-trained but Keynesian, believed that the full employment delivered by Keynesian policy would eventually lead to a more assertive working class and a weakening of the social position of business leaders. Seeing their political power erode, the business elite would organise a backlash against unions—even if full employment was good for profits, executive pay and shareholder dividends.
In the late 1930s, Swedish and Swiss unions grasped the need for an historic compromise with capital, as did German unions after 1950. In Britain, unions ploughed their own furrows, were infiltrated by militants from the Communist Party or various Trotskyist groups and as a result were unable ever to unite.
Getting labour-market policy right is one of the trickiest policy problems for progressive politicians. Conservatives can opt for simple, laissez-faire policies and will accept job losses and transfers of value-added wealth to a small number of beneficiaries.
FDR and Perkins did not conquer unemployment with their New Deal policies. One in five Americans was out of work in the 1930s. Only the massive rearmament programmes after 1940, when unemployment still stood at 14.6 per cent, made the difference. WWII finally allowed the state in America to take charge of the labour market, beyond Perkins’ cautious, step-by-step advances. In 1944 unemployment was down to 1.2 per cent and women flooded into factories and other work.
Frances Perkins was a remarkable woman and certainly no European country has had any women serving for such a long period to improve the condition of working people with such daily determination. An updated biography has now been written by the British left activist, Tom Levitt. He was an MP from 1997 to 2010 and The Courage to Medddle: the Belief of Francis Perkins is infused with his own career as an effective Labour politician seeking to promote social justice.
Perhaps a copy can be dropped round to Downing Street. Then instead of invoking Roosevelt to get a headline, Johnson would understand that if he wants to be Britain’s FDR he is going to have to reinvent himself—and drop the ideology that has governed his thinking since his Oxford days.
(Denis MacShane was a Labour MP (1994-2012) and served as UK Minister of Europe. He writes regularly on European politics and Brexit.)
– Social Europe
by Denis MacShane on 14th July 2020 @denismacshane